A Silver Lining North Idaho’s Mining Industry Shows New Signs Of Life
Ron Heyn walked quickly through the darkness 5,200 feet underground in the Galena Mine one day last week.
His headlamp flickered off dusty walls and pools of muddy water as he led visitors on a half-mile hike to Vein 123, a promising new discovery of tetrahedrite, the silver-bearing mineral.
“I haven’t seen anything like this in 20 years,” said development foreman Heyn, 49, gleaming with optimism about the silver deposit discovered a week ago.
Cautious optimism is spreading slowly in the historic Silver Valley once again.
The Idaho Department of Labor says mining employment has increased in Shoshone County in the last year - from 496 jobs in January 1996 to 760 now. While that is still well below the 2,800 mining jobs reported in 1981, it shows growth and fuels renewed hope in restoring at least part of the industry which made this area famous.
As always, silver prices are the driving force.
The Galena Mine was closed in 1992, after prices plummeted to $3.50 an ounce the year before. The mine was reopened in 1996 after prices briefly climbed to $6 an ounce the previous year. This year silver continues to hover near $4.30 an ounce, but was nearing $4.50 in the past week.
Refurbishing of a major lift at Bunker Hill Mine several weeks ago is another sign of renewed optimism in the area. Bunker’s closure in 1981 sent a chill through the Silver Valley and demolition of the two majestic smelter towers last year seemed to symbolize cloture more than rebirth of the mining industry.
Mining companies seemed more interested in exploration ventures in South America and Pacific Rim countries than in regenerating operations in North Idaho.
But now analysts say demand for silver - driven by industry, jewelry and photography - is beginning to exceed supply and prices may rise further, even as gold prices stagnate.
Because silver prices have remained low for so long, prices are expected to rise in the next 18 to 36 months, said Joe Rosta, analyst with CPM Group Ltd. in New York City. He adds that the key to success for any mining company still depends on the quality of the silver deposits and the low cost of production.
“A number of people believe that silver is a better commodity now,” said Doug Silver, senior partner at Balfour Holdings in Colorado.
“The demand outweighs the supply and that indicates prices will increase.”
So patience may finally be rewarded for Silver Valley Resources Corp. and miners like Ron Heyn.
Silver Valley is the joint-venture company co-owned by Asarco and Coeur d’Alene Mines Corp. The company has invested $5 million in capital expenditures in the neighboring Galena and Coeur mines, said Mike Lee, the mines’ general manager.
The company restudied ground geology, drilled deeper and found what they believe are higher-grade ore deposits in the Galena, Lee said.
And production costs have been kept low, adds Jerry Cooper, communication director for Asarco in New York City.
Since restarting exploration at the Galena and Coeur mines in 1995, reserves have increased more than 1.9 million tons, Lee said.
Depending on silver prices, plans now call for the current 200 employees to be moving 600 tons of ore daily by the end of the year, he said. Current production is about 500 tons a day.
Lee admits prices always are a concern, “but we are forging ahead.”
That’s encouraging for miners like Heyn, who started working in the mine for $17 a day some 30 years ago. Now his pay could exceed $200 a day, meaning he can stay active in the community and can plan again to send his two teenage children to college.
“For me, it’s my livelihood,” said fellow miner Vern Loper, 36. Loper worked in the mines 12 years before being laid off in the early ‘90s. He switched to working in the timber industry and doing odd jobs to support his wife and three children. Now, if the mining job holds, he can earn $40,000 to $60,000 a year, depending on how much rock he breaks.
Working 14 years at the Galena Mine spoiled him, said Rick Holmquist.
“I went to school, had a few odd jobs here and there, but work is hard to find,” said Holmquist, 38, who returned to the mine in March.
Labor department figures show the average wage for all workers in Shoshone County in 1996 was $19,894. Miners in the county averaged $35,643 last year.
“These people want to work here and want to live here,” said Heyn. “They have a new attitude. It means you know you have security for your family.”
He added: “We’re a rare breed.”
, DataTimes ILLUSTRATION: 3 Photos (2 color) Map of area